Get On With It

ForĀ  months now I’ve been raving about the foolishness of central banks, politicians, bureaucrats and the crony-wins-all system. Without politicizing the argument, it’s clear that Trump’s success as a politician reflects a lot of anger over the stupidity conducted on (allegedly) our behalf.

But there’s really nothing any individual can do. To change any of that chicanery I mean. What we can do is to arrange our own affairs to make them as immune from problems as we can. Diversification, micro-entrepreneurship, saving, cashflow and financial independence: these are the ledges on which we can nest.

Selling and working, saving and investing, budgets and blueprints are my future. Yours too, perhaps.

Passbook Account

The scene is right there, pristine in my memory. At the large meeting table in the staff room, the lady from the Commonwealth Bank sat. In front of her was a strong box. To one side a pile of opened passbooks; to the other, a similar pile of closed passbooks.

Mondays were banks days, I think we called them. Every child had a passbook (I’ll search for a photo in a bit) and made a deposit every week. The lady from the bank came to us to accept the deposit and annotate it by hand.

Imagine that: the bank came to us, and was happy to take twenty cents from children as young as five.

Unfortunately, the possible leverage over our savings habits so created was not used to best effect, but some vestigial elements remain, obvs.

Henley Beach Primary School, 1968: hardly the apex of banking service you’d imagine, but it was.

Secure in the Future

Savings rates are a function of confidence in the future. Apparently.

In countries where the populace feels that their needs will be met – in old age, infirmity, disaster – savings are low. In countries where people feel less secure, savings are high…at least where this is vaguely possible.

Interestingly, nominally market-based economies have low savings rates, and communist countries have high savings rates. Is this not counter-intuitive? Surely the point of a centrally planned place like, oh, I don’t know, China, is that the needs of the citizenry are fully and completely accommodated? Dire needs, not the need for Hermes products.

The unspoken benefactor is government. Most people in western countries default to the position that, should times get tough, “they” will look after stuff. Send money, in other words. Such is the debasement of our independence that this view is almost universal.

Let me get this right: in countries where financial opportunity is greatest, people rely most heavily on government, and therefore do not save. In countries where financial opportunity is limited (oftentimes by governments) people do not rely on government, and save. For the proverbial rainy day.

The notion of financial security then is proportional to the likely impost of government in our lives. Big government, which can only be big from taxes, can be a backstop because of the income derived from healthy private sector economic activity. And the one given about big taxes is the degree to which it destroys both liberty, independence and the size of the private sector.

Let’s remember just exactly how poorly savers are treated in capitalist economies, and how different it would be if we were more self-reliant.



The threads of our behavior influence us in ways of which we are often unaware. Those threads come from different spools, are of different lengths, and sometimes even of different materials.

Our parents provide the most clear-cut template for the way we go about our lives. We model ourselves on them from the day we are born, if not before.

Our peers, our schooling and the media give us the next level of understanding about what’s acceptable or not. You’ll notice that I’m not assigning value to any of these influencers; some are clearly better than others.

And the next and likely most insidious determiner of how we go about life is the society at large. By that I mean the laws, conventions, political systems, economic systems and so on.

I raise this idea of how we behave as individuals because, again, of Greece. Let’s compare and contrast Greek people and the people of China. In China, there is no social security net, so they save on average 25% of their income. You have to. Not to do so is to commit yourself to a life of poverty should personal disaster strike.

Chinese people don’t really think about retirement either. Yes, they will slow down as they age, but the concept of lolling about starting in middle age would seem fantastical to them.

And Chinese people are supremely entrepreneurial. The worldwide Chinese diaspora would be amongst the wealthiest group of people anywhere – only at home are they stymied with communist central planning.

The contrast with Greek people couldn’t be clearer. Since 1945, the sneaky message from successive governments is that you can have it all. You do not have to work particularly hard; you can have a decently-paid job; you can retire from that job on a workable pension; there will be no reckoning.

Well, the reckoning is here. Those political promises have finally reached the person who must foot the bill, which, in this case is the other Europeans. And the price they demanded was too high for Greece.

Fair enough. That’s how these things work. My point is a larger one, that there is no difference between Greek people and Chinese people, except for their expectations and behavior. The awful result of the slacker message was a long time coming, but come it did. Greek expectations were met for a long time. Greek behavior worked for a long time. Until neither worked.

We too must choose which model we want to follow, which behavior will be best for us.